Change Incentives to Promote Better Care - What the Government Should Do

Pay for Quality

The government should continue its efforts to incorporate pay-for-quality incentives into Medicare and other government programs. For example, the Centers for Medicare and Medicaid Services’ (CMS) Hospital Quality Initiative gives a hospital paid under the inpatient prospective payment (IPP) system its full Medicare annual payment update if the hospital reports a set of quality measures. In addition, under the CMS Premier Hospital Quality Incentive Demonstration, CMS is awarding varying incentive payments to participating hospitals for their performance in several clinical areas. In year three of this initiative, hospitals that do not achieve performance improvements above certain baselines will face financial penalties.

Preserve Medicare Advantage

BCBSA also recommends Congress promote management of chronic illness by preserving and building upon the Medicare Advantage (MA) program.

MA plans provide traditional Medicare benefits plus supplemental coverage in a comprehensive plan with a reimbursement structure that encourages a focus on prevention and care coordination. The evidence shows the coordinated care programs in MA are working. The National Committee for Quality Assurance’s State of Health Care Quality 2006 report shows significant quality improvements in MA plans across multiple health conditions, including improved treatment after a heart attack, improved colorectal cancer screening rates and increased numbers of members whose high-blood pressure is controlled.

Several years of efforts to bring vital chronic care management programs available through MA to the traditional Medicare program have been unsuccessful. BCBSA urges Congress not to take any action to unravel the wise investment the government has made in developing a high quality, coordinated delivery system under MA.

Improve Access to Generic Drugs

To promote competition and bring down drug prices to consumers, Congress should remove barriers to safe, effective and affordable drugs.

To allow a competitive market for biopharmaceuticals – an ever-growing share of the pharmaceutical market – Congress should give the FDA authority to approve scientifically feasible and safe generic versions of biological products, without imposing inappropriately long periods of market exclusivity for brand biopharmaceutical products.

Congress should also provide the FDA with sufficient resources to pare the growing backlog of generic applications.

Enact Comprehensive Malpractice Reform

BCBSA also recommends Congress enact medical liability reform legislation to address rising medical malpractice insurance premiums, which threaten the ability of patients to receive quality care. Rising malpractice premiums are fueling the rise in the practice of defensive medicine – increasing utilization of unnecessary, and sometimes harmful, healthcare services.

While medical malpractice laws were enacted to protect patients in the event of an egregious error in medical judgment or treatment, our current medical liability system needs be reformed so that physicians do not recommend inappropriate or unnecessary services for patients out of fear of being sued. Congress also should ensure that providers who reasonably rely on the guidelines from the Comparative Effectiveness Research Institute be given safe harbors from punitive and non-economic damages in malpractice cases.